tv [untitled] September 5, 2011 5:31pm-6:01pm EDT
if you can. follow him and welcome to cross talk i'm peter lavelle soak the rich during the great financial contraction millions lost their jobs and homes but the rich have only gotten richer should the rich pay more in taxes and are we experiencing nothing less than a new version of class warfare. to kick. start . the process not taxing the rich i'm joined by carl gibson in houston he is spokesman and organizer for us uncut in boston we have mike lapp am responsible wealth director at the united for a fair economy and in washington we cross to david logan he's an economist at the tax foundation all right gentlemen this is crosstalk that means you can jump in anytime you want and i really encourage it but first let's look at
a new solution to an old crisis. amid calls for budget cuts and formidable schemes for deficit reduction a new trend has emerged that gives altruism a whole new meaning spearheaded by billionaire warren buffett's call for the wealthy to make a bigger contribution to national tax basis french and german billionaires are also looking to their own pockets and saying the time has come for them to chip in. at a time when the public finances deficit and the prospect of a worsening state dept threaten the future of france and europe and when the government is asking everyone to show their solidarity it seems necessary for us to contribute to this over the past generation slashing taxes on the rich has been an accepted practice that promise to free up their expenditure and use trickle down effect further down the socioeconomic tree but in two thousand and eleven that sentiment isn't cutting much ice rich people corporations are avoiding paying one
hundred twenty three billion pounds in tax every year that's where the government should look to plug the hole in our finances not public sector workers who work hard to get paid very low levels of pay and in most cases even though it's a decent pension scheme at a very low pension in america a staggering two thirds of the income goes to just the top one percent of the population and with the economy deeply in debt the only trickle down is the bills taxpayers need to face to bail out banks and economies i think the american people are starting to wonder whether or not we have a real democracy or whether a few people who are wealthy are actually protected from democratic forces governments in europe and the us are at their credit limit and austerity said to bring balance to their books friends to revoke services used by the many and for the truly wealthy contributing to their national budget is an alternative to seeing their societies fall apart marsha chardonnay for cross.
ok i'd like to go to mike first in boston warren buffett says he's being coddled by . a congress that is controlled by billionaires is he being coddled and all are other billionaires being coddled and should they pay more in taxes. absolutely you know responsible wealth has been making this point for about ten years now. that the bush tax cuts need to go particularly for upper income folks. more than half of those bush tax cuts went to people in the top five percent like our members and there are people who realize that we want investment in our country that the government investment in education and infrastructure etc is really important for business for a healthy economy and that having more money in their hands doesn't necessarily make a healthy economy. you know so. it's long
since time that we should get rid of those those bush tax cuts ok david if i go to you in washington we just heard that. if you if you have these tax cuts these bush tax cut tax cuts it doesn't necessarily mean they're going rich people are going to grow the economy doesn't necessarily mean they're going to invest in the economy it doesn't necessarily mean they're going to create jobs do you agree or disagree with that. as generally as i can i would agree with. the bush tax cuts of. income filers of all income brackets and so you know you may see more investment being spurred by cuts to the rich as a result for two earlier by some trickle down effect but the low income earners are also benefiting from from these tax cuts which are set to expire and twenty thirteen in addition to that low income earners are also benefiting right now from
a two percent reduction absolute two percent reduction from six point five to four point five percent on the payroll tax tax which directly goes towards social security and medicaid benefits and this tax does by a greater proportion a fact the wealth and income of low income earners. but at a time when we when we have a serious fiscal. crisis in the united states a debt and deficit combined you know spending cuts traditionally and fiscal consolidations worldwide the experience is generally that spending driven fiscal consolidation and reports by the european central bank as well as goldman sachs have been has been. proven to be more successful than tax driven
solutions to the problem does that mean taxes can't be part of the solution absolutely not you know i would be a hypocrite and i am very much in favor of putting all spending programs on the table to be cut but i would be a hypocrite if i said that i was not amenable in some regard to putting all tax increases on. whatever i people should be don't you think i'll change the proposition i mean rich people have a lot of money a lot of move benefited actually going through this contraction should they get pay more in taxes i mean it seems almost to be a moral thing to do at this time expression we have these billionaires in europe and we have more warren buffett saying the same thing. and not just warren buffett blood because it was a multimillionaire hold on our. block tax group yeah yeah a tax grew like henry block who by the way is also a lifetime registered republican even he came out in the news last week and said you know the rich have a debt to this country they can afford to pay it and they should i would also
remind david lucan that the bush tax cuts while they affected all income filers over the last ten years of the of the bush tax cuts and income filer between twenty thousand and thirty thousand saved ten dollars a year well income earners above million saved four hundred thousand so it's very clear who benefits from those tax cuts and like henry block said the idea that those tax cuts create jobs and trickle down is baloney. mike you want to jump in there the big issue here is clearly you know clearly everyone along the spectrum is benefiting but most of the tax cuts have gone to the very wealthy and i would say the biggest issue here is that capital gains are taxed at fifteen percent so the very wealthiest are paying you know tax rates effective tax rates go up along the along the way until you reach about three hundred thousand dollars of income and then they go down progressively and the very wealthiest in our country pay approaching you know fifteen or sixteen percent effective taxes where the rest are
you know are paying higher so that makes no sense even warren buffett will say no one is making their investment decisions based on what the capital gains rate is so we're giving away a huge amount and if you if you if you fix that problem in tax capital gains as ordinary income dividends as ordinary income hedge fund managers as ordinary income that's five hundred billion dollars right there that's a third of the total amount that this committee is supposed to come up with i think that's the responsible thing to do it's crazy to think you know what most republicans are saying these days is we're only going to look at one side of the ledger we're only going to look at spending now any responsible business person if they had a problem with their you know in red ink they would they would clearly look at both sides you know how are we doing expenses and how are we doing on sales and revenue and to say that one whole side of this equation is up off the table particularly at
a time when tax rates have been lower and lower particularly for the wealthy is just really irresponsible and reckless i mean i think people are going to wake up and you know. don't want we don't want to give tax breaks for the rich we want our education we want our paved roads we want social safety net and people are going to you know they've made their ideological point but there's going to come a time when people are going to say hey wait a second this doesn't make sense to to be giving these tax breaks to the rich when we're cutting everything around us is ok what do you think about that david go ahead jump in. well i just i would actually be in agreement like i said before this notion of only having spending cuts on the table at this point seems to be counterintuitive to me it's a little disingenuous and i would i would agree and so far as to the fact that eventually people will look and say you know what spending cuts alone can do it.
but there are people that have said that tax increases can a lot of the burden which i think he was pointing out earlier the problem with the buffett argument is that he argues that is effective tax rate is seventeen point four percent which which i could argue on a couple different fronts but even then we're talking about extremely wealthy people who represent an extremely small portion of the united states taxpaying community and really what you're seeing. and obama proposed is more like. this tax increase on filers some above two hundred thousand to represent approximately five percent of earners in the united states. so the argument by buffett is one thing the argument on earners above two hundred thousand even one hundred thousand there is some money to be made there but if you look at effective
tax rates if you raise effect of tax rates on those earning more than one hundred thousand dollars a year by five percent across the board that yields you about two hundred billion dollars in the first year so we're talking about a little under two trillion dollars over a ten ten year period which is not insignificant but what is more significant is if you do if you let the bush tax cuts expire all the way down this is a revenue increase of three point six. trillion dollars over a ten year period and so the people that are advocating for these tax increases on the mega. wealthy i think are are we are losing sight of the slippery slope that i would argue you know that at some point you realize that taxing the extremely wealthy like mr buffett is not worth is about fifty billion dollars won't cut it and then taxing people over one million dollars in income won't cut it and then taxing people are going to think that we're going after that short break we'll
a free media dog to our teeth on tom. welcome back to rostock i'm beautiful about. to remind you we're talking about increasing taxes on the ridge. you. would take if i go to you karl and houston you know it's an interesting debate maybe we get into a moral dimension here about taxing the rich because they simply have much more wealth and particularly what is it for one of the fittest the richest four hundred people in the united states have more wealth than the bottom one hundred fifty million ok but nonetheless no one has said it in the program and i'm really surprised it's the rich that actually pay most of the taxes in the united states.
you know if you're talking about federal income taxes then you might be right about that but i would remind your viewers and your listeners that you know actually the bottom the bottom half of americans you know the most most of the taxes that we pay we pay a third of our income in sales property payroll excise taxes you know i've heard a lot of folks talk about you know referring to the bottom half of americans as lucky duckies who don't pay federal income taxes you know although i'm sure those folks who cues us of being lucky. probably i would i would love to see the reactions of trading places with a single mother who's working three jobs to keep the rent paid at the end of the month scraping quarters together to buy beans and lentils and ramen noodles for dinner you know it's there's such a divide of wealth in this country you know in one nine hundred twenty eight about eight hundred seventy i'm sorry the top point zero zero one percent owned eight hundred seventy times more than the bottom ninety percent right before the great depression right before the great stock market crash that that sent our economy
into into a depression now that ratio is even higher it's about nine hundred seventy two times more that they own more than the bottom ninety percent the wealth disparity in america is greater than it's ever been and the economy is really top heavy right now there are a lot of people who have a lot more than pretty much everybody else so you look at traditional banana republics like. you know venezuela nicaragua ok if i go to david. is it the tax regime in the united states it's created this inequality of wealth and income. well i would argue that there are certainly there are certainly provisions in the united states tax code that are inefficient you know part of that does go to exactly what carl mention payroll taxes in particular of affect the low income earners of our population much more than they affect the high income earners who tend to make their money on money as mr buffett does point out
but what we're kind of losing sight of in this moral debate is defining wealth versus income and really and i understand the wealth disparity argument but the debate currently in the united states is really on this issue of income redistribution and taxing the end come of people there are certain types of wealth taxes and you can argue that certain income tax increases affect effect the rich maybe less than they affect the poor. but at the same time we also have the most progressive tax system in the world like you pointed out earlier and again we're talking about income taxes not wealth and i think that distinction should be made ok if i go to you mike i mean we might do have a what would you do i mean what would be fair what would be fair a flat tax i mean the reality is we do have a progressive tax system but it's not that progressive in terms of. how it plays
out effectively and over the past twenty or thirty years we have seen tax rates go down for upper income people and that has led to a lot of concentration of wealth. one thing that we're not looking at having discussed today yet is you know that at the state level you know taxes are very regressive you know there are a little more progressive at the at the federal level but at the state level they're not. and you know one of the things responsible wealth our members of seven hundred members around the country are doing is using their voices to say. we need to have more progressive taxes at the state level because currently if you're upper income you're paying you know four or five percent often of your income where lower income people are paying you know ten eleven twelve percent we had one hundred of our members in new york state sign a letter to the governor saying tax us more we had bill gates sr who is one of our members the father of the microsoft guy led the. effort in washington state to
state a. income tax on upper income people and these are people whose who get that. we we we can't continue to have lower and lower rates on upper income people my what what would be fair to them that would be fair i mean we can say we're all saying that you know it's easy to say that tax the rich tax them or what but how much more what would you do ok so the first thing i would do is make capital gains on par with regular income not advantage that that income stream and dividends as well i would raise make the taxes you know particularly at the upper end go back to the the pre-book levels you know and that would account for quite a bit in terms of income and you know i think at some point we may want to look at even more progressive taxes i also think we need to have a stronger estate tax you know it's it's been weakened but if you made
a lot of money in this country you did it with a lot of government support a lot of society support when you go to hand that money on to the next generation you should pay a significant chunk of that and estate tax has been weakened at least for these two years and we need to make sure and two thousand of our members have have signed on saying we should we're upper income people who are wealthy people we should have a stronger estate tax so that's another piece of this that sometimes gets lost what do you think david what would be equitable what would be fair go ahead yeah. well if i could just hop in on two of those points in particular first. the drop in effect of taxes over the past thirty years is absolutely correct what we need to also realize is that the drop of effective tax rates among the poorest two quintiles in the tax code has dropped much more precipitous lee than it has for the richest quintile so that puts it in a little bit more i think of a fairer context as far as the state taxes are concerned what we've seen is the
state tax rules currently are very genuine generous five million dollar exemption and then i believe a thirty five percent rate tax above that there's been extensive research done by you know even larry summers that says that the estate tax is pretty much levied to accomplish two goals to break up dynastic wealth the united states and to redistribute wealth and that it is proven in shown through studies by the congressional research service and people like summers and kotlikoff prominent economists that it simply doesn't accomplish those goals in addition to only raising about point one percent or point to three percent of our entire tax base when you think about the car i mean it should be the role of the state is reduced to be wealth. i mean there are four really really easy solutions that can you know raise four trillion dollars in revenue in the next ten years that nobody's talking
about you know one of those is closing corporate tax loopholes that lead corporations offshore their profits that be one hundred billion dollars every year another one is a financial speculation tax on faulty trade credit default swaps and derivatives whatever those are that's another you know one point five trillion dollars in ten years and another ten years you could get you get another hundred billion by taxing having a new million dollar top income tax bracket and of course you mention the estate tax if you progressive tax to states worth five million and you'd make an extra forty five billion dollars every year you put all those together that's four trillion in ten years really sensible solution that leaves the poor and struggling middle class to learn it well though those are very interesting solutions but mike is there any political will to get there. you know what's interesting is when you when you ask people would be you know do they want tax cuts they say yes we want tax cuts when you ask relative to all the things the spending cuts that would have
to happen to make that then then tax cuts are not as popular but if you ask people do they think taxes should be raised on people above two hundred fifty thousand dollars about two thirds or more of the population in polls say yes and that figure goes up and and even wealthy people believe that but unfortunately the people who are in congress right now and the folks who are contributed with them apparently are holding the day and saying you know we're not going to consider those tax cuts but i think i think there is you know going to be a groundswell i think that people public opinion supports raising taxes on upper income people. david if i go to you in washington me in my introduction i mentioned class war i do you do you find that social tensions rising now because of that i mean we've been talking really what we've been talking about in this program is the is the distribution of wealth in the device of the united states right now is what
it's been pointed out on the program it's never been this bad since the advent of the great depression i mean is is that for solutions that we just heard karl so you could not be politically viable i mean that would certainly take a lot of tension a lot of pressure out of what's going on it might be politically viable like he says it is absolutely true somewhere between sixty and seventy percent of the american population is in favor of raising taxes the way obama has suggested however that doesn't necessarily affect how they vote as a whole there there is a bevy of other issues upon which other people base their their voting so i don't necessarily go by that to determine political feasibility if i can i'd like to go back to what we might all agree on closing corporate loopholes and eliminating certain tax expenditures is definitely an avenue that i would be willing to to look at which i am actually currently researching extensively for for example our
mortgage interest deduction that we have is the second most expensive tax expenditure in our code at about one hundred billion dollars of revenue not gained by a by the government so over a ten year period with inflation we're probably talking you know eight hundred billion dollars toward our deficit which is not an insignificant amount closing loopholes on top of that like i believe carl suggested is another thing that seems garnered some support in corporate tax reform debate in congress ok mike i'd like to end on you i know you come from a very wealthy family do you do you do write the. check because you think you should pay more money. you know that i've heard that many times people say well if you think you should people like you should pay more just write a check and the idea that we could have. voluntary tax that that would that would do the trick is just really image her frankly. everyone uses the tax code to their
advantage but people like warren buffett and responsible wealth members are speaking out and saying look we need all of us who are upper income to pay at a greater rate and we have to jump in here we're running out of time many thanks to my guest today in houston boston and in washington and thanks to our viewers for watching us here at r.t. see you next time remember cross talk rule. syrian
kill israeli special forces to get the green light to shoot at palestinian independence protesters. and seeking solutions russian russia and ukraine agreed to talks as kiev pushes up for discounted gas supplies unable to cope with the current crisis love. to bring you the top news stories from around the world this is our team i'm sean thomas glad to have you with us syrian security forces launched their biggest to sweep against anti-government protesters trying to flee to turkey it comes as human rights organizations claim thousands have been rounded up and hundreds killed in the last month alone meanwhile russia is rallying members of the un security council to encourage the sides to stop violence and start to go.